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Fee for repair take-ins?


#1

I am thinking about leasing a fine jewelry store that is going out of
business so that I can sell handcrafted costume jewelry, supplies &
classes. They mentioned to me that their customers were asking where
they were going to go to get their jewelry fixed after they left.
They have taken their equipment with them and plan to do work for
another non-jewelry shop. I offered to continue taking in job orders
for repairs for them to do (I am trained to do so). Would I charge
them a flat fee per job or ask for a percentage of the receipts from
the repairs? Or something else? Suggestions? As a startup business, I
could really use this extra income.


#2

Simple

Take them in, send them out to be fixed, when they come back charge
the customer double what it cost you to get it fixed.

David Geller


#3
Would I charge them a flat fee per job or ask for a percentage of
the receipts from the repairs? Or something else? Suggestions? As a
startup business, I could really use this extra income.

Well, Lynn, I had some thoughts that you would likely not take very
well, but it’s better to sum it up by saying you are making things
needlessly complicated. You take in repairs, and in so doing you
(you say you know how) do the work: inspection, consultation, what’s
needing to be done, perhaps estimates which you get from your
workshop or maybe David Geller. You send it to the shop, they send it
back, you mark it up and everybody gets paid. It’s a standard model
of doing business. I had the question raised lately in a slightly
different context: We, as a trade shop, do not buy customers. We
don’t pay fees to people for bringing customers or work, just don’t
and won’t. Everybody has to do their own job.


#4

Hi Lynn;

I offered to continue taking in job orders for repairs for them to
do 

I’d think this over first. You are going to be responsible for that
jewelry as long as it’s in your possession, so you’d better have
insurance, an alarm system, and a well rated safe. A break in could
not only cost you your business, it could saddle you with debt for a
long time. Also, suppose there’s a situation where a customer claims
their stone was switched, or there’s a case where you advise a repair
and they are not happy with the results. You could easily be named as
one of the parties in a lawsuit. At the very least, you could end up
paying a lawyer. What are you going to do when you tell the customer
one price, and when the shop gets it they call you up and say, “we
need twice that much for that work”? The customer can demand the
lower price and you’ll end up eating the difference. What kind of
guarantees can you offer on behalf of the people actually doing the
work? Do you think they are good enough at it that it can’t damage
your reputation by association? In my opinion, repair work is the
domain of the absolute best in the trade. There’s a lot of learning
the hard way involved, and it’s probably the best chance for first
impressions and word of mouth advertising, and if it goes
south, it can really hurt your business.


#5

Absolutely you should get a fee or something. It’s going to be your
store, you are going to have to take the time to examine the jewelry,
figure out pricing and sell the repairs (they don’t always just
magically appear with prices already tagged and tickets made out :wink:
you are going to have to keep track of the jobs, call the customers,
secure and insure all of the jewelry, on and on. When they move out,
they give up their repair business and any other business they would
have gotten at that location. You have absolutely no responsibility
to help them keep it, let alone help them make all the money it
generates. If they don’t want to give it up, they shouldn’t move out!

You should get half. Or more. This isn’t just a made-up or arbitrary
number, it is based on generations of jewelry businesses and their
costs, and it is how prices are determined in jewelry businesses all
over the world. You’re doing nearly half of the work, assuming many
of the costs associated with repairs and taking on a lot, if not most
of the risk. Get David Geller’s Blue Book of jewelry repair and
custom pricing. Charge the customers what’s in there, and pay the
shop half of that. Or work something out with them, get their price
list and double it or whatever, but you need to get somewhere around
50%, some retailers get 65%. If they don’t want to work something out
like that, find another trade shop or hire a benchie. This is not
just optional or extra income, it’s critical to your survival. It’s
part of the business. It’s the only reason you should be paying rent
at that location in the first place!

Please give up the notion that you must do a lot of things for free.
You don’t. In fact, owning and running a business, you flat-out
can’t. If you do, you won’t be in business for long. You will have to
become hard-nosed about it. None of your suppliers or vendors are
going to give you anything for free, they can’t afford to either, and
believe me, they will have no problem at all being hard-nosed with
you if you’re late with a payment. Don’t be afraid to charge (and
charge more than you think possible) for your goods and services. You
may just find that your customers will value them more highly if you
value them highly yourself.

A little tip, when they have the phone cut off, call the phone
company immediately and get their old phone number. Don’t talk to
them about it or ask them if it’s OK, just do it. Trust me, it is OK
it happens all the time, their old customers will appreciate it, and
it will be like money in the bank for you. If they decide to get
angry at you, well, they shouldn’t have moved out and cut off the
phone, should they? This owning a business thing ain’t badminton.

All the very best of luck to you Lynn! You’re in for the E-Ticket
ride of your life!

Dave Phelps


#6
You are going to be responsible for that jewelry as long as it's in
your possession, so you'd better have insurance, an alarm system,
and a well rated safe. 

The prior owners will be leasing the building the building to me,
and it has a security system and a very large safe included. I will
have business insurance, as well.

When they move out, they give up their repair business and any
other business they would have gotten at that location. You have
absolutely no responsibility to help them keep it, let alone help
them make all the money it generates. If they don't want to give it
up, they shouldn't move 

The idea of taking in repairs and having them do them for me was my
idea. I thought we could both make some money by doing so. Even
though I have bench jeweler training I have no desire to do repairs
myself. That’s just not my area of interest. These people were in
business for 20-30 years, but I’ll check to make sure the quality is
still good. Perhaps I will limit the repair take-ins to simple
things like resizings or polishing.

Don't be afraid to charge (and charge more than you think possible)
for your goods and services. You may just find that your customers
will value them more highly if you value them highly yourself. 

You are the second person in two days that has told me that. The
other person was a lady who runs a store across the street. I will
take these comments very seriously. After all, if they want really
cheap mass-produced China-made stuff I’ll send them down the street
to Wal Mart. Those aren’t my target customers anyway. She seems to
be doing ok selling $75 blouses.

Thank you all for your comments and suggestions.


#7

If you are simply forwarding the jobs without looking at the
contents then maybe a flat fee, and if the job happens to move
forwards and back more than once the fee should apply each time. I
really can’t see how this scenario could work because it makes you a
courier.

If you are responsible for the customer being happy with the total
outcome then definitely a minimum 2x mark-up on the price quoted to
you by the repairer. You will have to determine exactly what YOUR
customer wants, pass on the to the repairer preferably
with detailed specifications, ensure that the work is done to your
complete satisfaction, hand over the completed work, and do all the
paperwork for billing your customer and paying the repairer. You
have risks at both ends!

Widening your choice of repairers, fabricators and suppliers
(whether in-house or interstate) is mandatory. The previous leasees
may have gone out of business because they were ‘hands-on’ rather
than people orientated.

Leasing a shop makes you a facilitator…customers will go to you if
you are the one who gets the job done and they don’t care how it’s
done, only that it’s done well in all respects.


#8

Hello Lynn,

I just happened to see this post and didn’t see the original
question. If you could e-mail me privately your original question,
perhaps I can help you and others - I have been restoring silver as
a my livelihood for the past 26 years.

Jeff Herman
Herman Silver Restoration & Conservation
http://www.hermansilver.com


#9
Absolutely you should get a fee or something. It's going to be
your store, you are going to have to take the time to examine the
jewelry, 

I should clarify something, I guess. David said essentially the same
thing as I did, in different words. David Geller put it short and
sweet. The problem I have is with that word, “Fee”. A fee is
something you pay for the privilege of doing something - bank fees,
ticket processing fees.

At least that’s how I take it and I speak English… If you were
to tell your customers (or vendors) that they need to pay a “fee” to
you, they’re run hither faster than you can see. If you just do
business - buy low, sell high and just tell your customers that it
will be $79.95, everything will be just hunky dory.

It’s just a language thing in the end, but it’s language that makes
the world go round.


#10
A little tip, when they have the phone cut off, call the phone
company immediately and get their old phone number. Don't talk to
them about it or ask them if it's OK, just do it. 

Great advice. In fact, I have heard that when a local jeweler closes
up, some jewelers who were former competitors are taking their old
phone number and having it routed to their store! David is right,
this ain’t badminton.

Mark